Vanguard, iShares win big in first ETF awards

The Vanguard Group Inc. and BlackRock Inc.'s iShares unit were the big winners in Morningstar Inc.'s inaugural exchange-traded-fund awards. The two ETF giants took the awards in four of the five broad asset class awards. Vanguard was named the best ETF provider for sector and U.S. equity ETFs, while iShares was named the best for taxable bond and international equity ETFs. Barclays Bank PLC's iPath exchange-traded notes won for best commodities ETFs. The awards are based on the total cost of ETF ownership, which includes expense ratio, tracking error and risk-adjusted returns. Morningstar ranked ETFs across 37 different asset classes and picked the best for both retail and institutional investors. The institutional rankings put a greater focus on liquidity, since those investors are more likely to be moving big chunks of money in and out of ETFs more quickly than a retail investor. The ETFs that won their respective categories will have the honor noted on their Morningstar pages. An ETF needs to have at least a three-year track record to be eligible, which is why ETFs from the Charles Schwab Corp., which were launched in late 2009, were not eligible for this year's awards.